SERVICED ACCOMMODATION FAQ’s
+44 1244 343 355
Residential Estates offer a unique option when it comes to the Short Term and Corporate Lets package. We are the only company in the UK that offers, not only the sourcing and the opportunity to buy suitable properties that fit all legal requirements, that are in the most desired and up and coming locations, and offer the appeal for the consumer, but we also offer the management option for those apartments. We utilise the ever increasing demand for the short term let and corporate market, combining that market with the tourism demand, we can supply high occupancies on nightly rates, from 2-7 day stays to the contractor or relocator on a 3 or 6 month stay. This means that you have a partner all the way through the process, even offering a service for resale should you ever wish to utilise that option.
How the Short Term and Corporate Let market works for our landlords/investors. Due to the fact that these lets are charged on nightly or weekly rates, rather than a standard fixed monthly rent, this means that your returns have the potential to become significantly higher than your normal AST (assured shorthold tenancy). If you consider that these apartments are nearly always situated in high growth areas then they are going to attract the most demand. In the past, rents would be designed to cover outgoings and leave you with a small profit each month, the shorter term option allows higher returns through rentals which, then allows the landlord / investor the best of both worlds, high returns and appreciation. We have access to all routes to market, and the vast majority of these routes are not readily available to the general public. Of course there are other companies and options out there, but the vast majority will just use AirBnb, Booking.com and Expedia to fill your apartments. These are generally short term stays (between 2-7 days) and are great, but do cost more in the long run, due to more cleans, more laundry and more footfall. You also have the potential for more damage as these short terms can involve groups such as stags and hens and that is something WE DO NOT entertain in our apartments. Residential Estates will use relocation companies, specialist contracting companies, that operate alongside multi-national companies like HSBC and M&S Bank. These tenants tend to book on average stays of 28 days plus which makes the process so much smoother, and any void periods we can utilise the main short term let options as mentioned above.
How does the relationship work between Residential Estates and the landlord/investor? We take on the full management of the apartments involving all the marketing, letting, managing the bookings, managing the properties and providing you with transparent systems to view how your apartment is performing. These are hands off and suit those that would not have the time, nor inclination at this time to get involved with this for whatever reason, generally because they have a full time, demanding role or are based away from the investment. One other thing that is very important to note is that first and foremost, you have a strong investment, regardless of the additional attraction of the Short Term and Corporate Let model. In many developments we also have exclusivity, having negotiatied with the developer, on being able to offer the short term corproate model, meaning saturation is kept to a minimum.
What is the difference between “serviced accommodation” and Short Term and Corporate Lets? There is a very important difference between these 2 and it is one you have to understand. If something is advertised as “serviced accommodation” this is the definition: “A serviced apartment (also known as a service apartment or an extended stay apartment) is a fully furnished apartment available for short-term or long-term stay, providing hotel-like amenities such as room service, housekeeping, a fitness centre, a laundry room, and a rec room.” Now that sounds perfect but the major difference is that the “HOTEL LIKE AMENITIES” will restrict many mortgage lenders lending, as this is not considered a resaleable property. These are also restricted use properties designed and built for this very purpose, you will NOT be able to rent it out on a AST, you will NOT be able to live in it yourself and you will NOT be able to manage it yourself. What we are offering is a variation of management on your standard apartment, so as a client you are buying a “Non-restrictive” apartment, one that CAN be lived in or used by yourself, that CAN be put on a normal AST and CAN be managed by yourself, and it can be run by a company who can manage the apartment on short terms lets – it is not run as a HOTEL. This also helps when it comes to looking for leverage, as Short Term and Corporate Lets are acceptable in that form as you are buying an apartment that can be sold to ANYONE on the open market down the line.
What other advantages are there with running the apartment in this way? There are some subtle advantages with your apartment being run this way, two of the main ones are that your apartment is kept fresh and in good shape, with a clean every week and weekly reporting you are notified of any damage or of anything that may need changing very quickly, rather than waiting for 6 or 12 months to find your apartment has been ruined and all your profits are gone. The other benefit is the option it gives you if selling onto an investor down the road. A lot of clients and investors like to buy properties with a proven track record and will buy on a proven %yield basis, with >6% being seen as a good return. As an example, you have purchased an apartment for £200k and are achieving a yield of £16,000 (8%) after all costs – that is a great yield for a City Centre BTL property. If you then decided to sell on your property with a 6% return then you calculate how £16,000 equates to a 6% return and that figure equates to £267,000 at 6% - an immediate increase of £67k on your property – obviously the higher the return (and it has got the potential to be higher as this is a standard return once the profile is in place) then the more profit for the seller.
Can I buy any apartment and run it on Short Term and Corporate Lets? No, the investment side of our company goes to great lengths to secure viable investment opportunities, that fit the criteria needed. However you will generally find that a large percentage of old and new developments do not allow the use of your apartment for Short Term and Corporate Lets, for a few reasons, namely – the lease restricts you, the developer also handles the management of the apartments and will not allow it and finally the block management will not allow the use of the apartment for this use, particularly in a predominantly owner occupied development.
Tax Advantages to the model There are numerous tax advantages to letting out your property as a short term let, however as we are non regulated we are unable to advise on these. We can however suggest speaking to the following company, STAX, www.staxuk.com, who are property tax advice specialists.
What can I expect when it comes to returns? There are quite a few variables involved with this figure, price of apartment (not always the highest price apartments that bring the biggest yields), length of short term stays, amounts of cleans and laundry, occupancy rates and so on, and also after the property had all the necessary time to promote itself and reach the top of the listings which is exactly all the work we do behind the scenes to make the property as cost efficient as possible. Based on all that, it is fair to say that with something very achievable like a 75% occupancy rate that you can expect double what you would achieve on a normal rental – but when occupancy rates increase then so do the yields. However as outlined above in the example of selling on, if you can achieve a 10% return over a 5-6% return then your exit strategies become very exciting indeed and your property becomes highly attractive.
How will my apartment be marketed on the corporate model? Your property will be marketed through our established service user database and through our relocation guests. We also carefully select suitable tenants via online resources such as Air Bnb, Bookings.com and hotels.com
Who is our target market?
*Occupancy Rates 1st December 2019 - 1st May 2021 “Even throughout the lockdown period created by the COVID-19 pandemic Residential Estates average occupancy over all our sites was more than 65%”
• Relocating staff • Professional contractors • Operational directs • Managerial directors/senior executives • Carefully selected leisure bookings • Overseas clients
Will my apartment be rented out nightly/monthly/ yearly? Our aim is to focus on long stays wherepossible, and book them months in advance to enable us to fill in the vacant periods with short term lets
Residential Estates specialises in the provision of Short Term Serviced Apartments in Chester, Liverpool and Manchester regions. Our serviced accommodation is fully furnished and equipped with everything our clients would need while away from home. The serviced apartments provide guests with a luxury experience, maximum flexibility, and independence - whether they are travelling for business or for pleasure. Our experienced team of staff are on hand to meet and greet our guests on arrival, introduce them to the area and make each individual feel at home.
Some reasons why our tenants choose Residential Estates • Each apartment is fully equipped with all necessary appliances. • Flat screen TV, telephone and unlimited wifi usage included. • Most apartments have parking. • Car Hire/Chauffer Service • Restaurant reservations • Arranging tours of local attractions • Running miscellaneous errands
How can Residential Estates offer this option when it comes to property management? Because the model has been in place for over 10 years, we like to be able to offer our investors the best way to maximise the return on their investment. If the demand is in the area for Short Term Accommodation then it is a great way to increase your yirleds compared to a normal long term AST. We actively search for developments that fit the criteria our model demands, location, specification and more importantly the lease allowing us to effectively manage your apartment. Why doesn’t every agent offer this? 1) You need the model in place and running smoothly. smoothly We have built up a strong management team to help with the advertising, marketing and 24/7 management of all the Short Term Serviced Apartments we look after 2) You need the relationships and the clients. Residential Estates has grown strong relationships with relocation companies and large corporate clients who re-book with us time and time again. 3) You need a lease to allow it, you cannot just decide to do it. On searching suitable investment opportunities to market to our investor clients we speak to developers at build stage, ensuring that lease options are considered when a site appears suitable for Short Term Accommodaiton
Video Walkthrough Example Apartments City Suites, Chester Saddlery Way, Chester Halo, Manchester
Can you manage any development you sell, irrespective of where it is located? Short answer to this is yes. We may not always be able to manage the properties directly ourselves, however we have spent considerable time in building relationships with high profile professional management companies around the UK in order to be able to offer our short term let management options on any development we identify as fitting all criteria at the sourcing stage. These partner companies are well established within the industry and we only work with those who can provide our clients with the same level of service that we provide ourselves. Partner Companies:
How do the clients you attract differ from those I could get myself? Our aim is to supply long term contracts and large corporate entities to block book the apartments on our model, these are sourced through specialist organisations that are the largest in the field for this service. Some examples of those clients are below:
What other advantages does the model offer? The model provides a strong safeguard of the condition of your property in the long run that a normal AST tenancy does not. There are always stories of landlords that have been left with a cleaning bill after a long term tenant has moved out after 6 months or a year. With the corporate model your apartment is cleaned weekly, a report/inspection is carried out weekly and your apartment is kept in perfect working order and condition throughout because that is what the next clients that stay will expect, luxury apartments in a quality location - so your investment is being kept in tip top condition. We made mention of long term ASTs, don’t forget you have this option to fall back on, we always ensure our locations are in perfect areas with high demand for both Short & Long term tenants, providing YOU with multiple revenue stream options
“Testimonials” I have been a client of Residential Estates since Aug 2012 when I bought a new build flat in Chester. Since then I have been very impressed with the service and the communication I have received from them. They seem to select very good clients and take care of my property very well, as whenever I return to Chester to check it out it always looks as good as the day I first bought it. The communication with the office is first class with most emails being answered within 4 working hours and all emails within 24 hours. Payments have been made to time every month without exception and the expenditure on repairs/refurbishment/replacements has been surprisingly low. All in all a very good company, a real pleasure to deal with and one I can heartedly recommend.
Had a great weekend stay in an excellent, modern apartment in Manchester. Very reasonably priced and the apartment was in a great location, with great entry security and part of a modern development. Well appointed and immaculate, tasteful contemporary decor throughout. *****
Great apartment , completely equipped with everything you need, in a great location with easy access to the public transportation (trains, trams, buses). the most important thing is that the host was very attentive, responsive, and very friendly. I would definitely come again! Keep the good work... AIRBNB REVIEW
For more information on Short Term Corporate Let Investment Opportunities please contact our team t: +44 (0) 1244 343 355 e: sales@residential-estates.co.uk w: www.residential-estates.co.uk